Mower County transcript. [volume] (Lansing, Minn.) 1868-1915, 1887-02-04
BUILDING ASSOCIATION.
THE ASSOCIATION IS NOW
READY TO RECEIVE
APPLICATIONS
A Full Explanation Of the Work
ings Of the Association by
Secretary Howell.
The Association will begin to
Build Houses as Soon
as Possible.

The Building Association has made all
arrang gements for issuing stock and max
ing loans, There have been many in
quiries as to the workings of the Associa-
ton. which are simple enough when once
understood.
Mr. S. L. Howell, the Secretary Of the
Association, has kindly furnished us with
full explanation of the system, which
will be read with interest by all interested
in building. Any additional lnforma-
ton Will be furnished by HIM at his office.
Following is his communication:
EDITOR TRASscR1PT:-l gladly avail
myself Of your kind invitation to explain.
through the columns of your enterprising
paper, some Of the more prominent fea-
lures Of the general workings of Building
Associations; and to present few of the
practical advantages they offer to the
general public.
These associations were not originated
in the interest of capitalists, but are
peculiarly calculated to benefit the mid
die classes and laboring element of the
community The amount stock that
can be held b any one person is limited
SO that it is impossible for the speculat
ins capitalist to own a controlling interest
IN the capital stock, and thus freeze
OUT the smaller stock holders. The ele
ment Of mutually is the underlying prin
ciple Of these associations. The holder
| OF a single share receives exactly the
same percentage of profit upon each dol
lar invested, as does tie holder Of hun.
urcd shares; no more, no less.
Stockholders may he divided into two
general classes. viz: Non borrowers and
borrowers. Non borrowers avail them
selves Of the opportunity offered by the
ASSOCIATION to accumulate fund for the
proyerbial rainy day" by the monthly
| payment Of such sum as they can regular
! ly save from their earnings. purchasing s
as many shares of stock aS such sum will
! pay for
The total amount thus paid in from
month to month is increased at stated
periods. by the division of the profits ac-
crued; pre- rata.
! Borrowers must purchase stock the
same as nonborrowers and make the
same monthly payments thereon, and
! they receive just the same share Of pro-
fits on their stock as borrowers. Up
to this point the borrower pays just the
same amount and receives just the same
benefit as the non-borrowcr. Bnt when
! he becomes not only purchaser Of
| stock, but also borrower: and the assO-
citation actually pays over the money to
him for his own use, he then becomes
possessed of privileges not enjoyed by
the non borrower, and must therefore,
pay for such privileges; that is, in addi
| ton to the monthly payments necessary
to entitlc him to a percentage Of the pro
fits accruing to the stock, he must also
make monthly payment of interest on
1he money that has actually been paid to
to him, at the rate of six per cent. pei
annum.
This can best be shown by the follow
ing practical illustration:
The shares of the Austin Savings and
Building Association have been fixed a,
$50 each; and the membership fee i.
Is cents per share. The monthly pay
ment necessary to become simple par
chaser of stock, or non-borrower, IS 2;
cents on each share. This monthly pay
nent is kept up until the amount paid il
on each share and the profits added shall
equal $50. Then the purchases is entl
tied to receive $50 in cash for each shar
owned by him. The average time re
quired for the shares to become $50, ha
been found to be ten years or 12O months
although the time is often shertcr o.
the basis of 1870 months, monthly pay
ment Of 20 cents per share and joinin
fee Of Is cents per share, a membe
would actually have paid in on ten share
1901 so, and would receive, at the end 0
the 1870 months $500 in cash.
Now, borrower who wishes to get
loan Of $500 must purchase ten shares Q
stock; but in addition to the payment
the non-borrower must make. he mus
pay interest monthly on the money II
ceived by him at the rate of six per cen
. per annnm, which is one half of on
per cent. monthly. Each share is x5t
One half Of one per cent. Of $50 is
cents. So that the monthly payments c
interest is IS cents per share. Add th
to the monthly payment Of the nor
borrower, and 1t makes the borrower
monthly payment on each share so cents
At the end of ten years. he also is ent
tied to receive $500 on his ten shares {
stock, for which he has paid exactly tn
same as the non borrower. But he owe
the association $500, which has had dul
ing the ten years. He has paid only II
interest on it, SO, instead Of receiving Ii